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Commodities 2022: 'Aggressive normalization' seen for US HRC prices after 2021 peak

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Update time : 2022-01-04 17:48:12
Following a year in which US hot-rolled coil prices reached an all-time high, steel industry analysts are expecting 2022 to be a year of normalization and downward pressure as more supply and shorter lead times improve availability for buyers.
"I think the bottom line is in 2021 there was a shortage," Phil Gibbs, equity research analyst at KeyBanc Capital Markets, said in a recent interview with S&P Global Platts. "Our outlook for next year is looking for some aggressive normalization, particularly in spot pricing as supply has become more available."

US HRC spot prices entered 2021 rallying, already near an all-time high at $1,009/st, according to Platts pricing data. The price cracked the "grand a band" threshold in the final week of 2020 and surged an additional 94% to an all-time high of $1,960/st in late September.

Price erosion began in the third quarter, though domestic HRC spot prices remained supported above $1,900/st through mid-October before falling 24% from the peak in the final months of 2021.

 "The US steel market is now in surplus, unlike having been in a deficit over the past year and a half, and that surplus most likely grows larger next year," UBS analyst Andreas Bokkenheuser said in a recent interview with Platts.

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